Comments on: Maybe Williams-Sonoma should start selling corporate jets…

By: Michelle Leder

Michelle Leder — Tue, 03 Jun 2008 11:10:48 +0000

Just saw a story in the Miami Herald about perks which included two examples of companies with similar deals, which shows just how prevalent this perk is:

MasTec charters aircraft from a third party that leases two planes from companies owned in part by Chairman Jorge Mas and President and CEO Jose Mas. MasTec paid the chartering company about $800,000 last year. Same deal at Perry Ellis International, which paid $743,000 to charter an aircraft from a company owned by Perry Ellis CEO George Feldenkreis and President Oscar Feldenkreis.

A link to the full story, which includes various other perks is here.

By: my crackpot theories

my crackpot theories — Tue, 27 May 2008 18:56:57 +0000

Thanks for letting me know how clueless I am, Michelle It *is* hard to keep up.

So the previous plane was owned by the corporation/shareholders, who profited when the plane was sold at a profit.

But under this new level of corruption, if the plane is sold at lease end for a profit, then the CEO profits personally, while the shareholders pay for his trips to Martha’s Vineyard.

The amazing thing is that no one sees anything wrong with this. Or at least no one who is in a position to do anything about it.

By: Michelle Leder

Michelle Leder — Tue, 27 May 2008 18:11:34 +0000

Sorry to be the bearer of bad news, but you haven’t been paying attention. While I can’t tick them off the top of my head, there’s definitely quite a few companies that have similar arrangements with their CEOs, including (I’m pretty sure) Apple. What’s different here is the cost-savings happy-talk. And the fact that Williams-Sonoma is somewhat late to discover this.

By: my crackpot theories

my crackpot theories — Tue, 27 May 2008 17:17:15 +0000

Wait a minute – the CEO forms a shell company to buy a jet to lease it to the public company that he runs himself. He is the only user of this plane. So he profits personally from his own use of the jet that he is supposedly using to save money for shareholders.

Is this some new level of corruption in the corporate suite, or have I just not been paying attention?

By: Vito Boscaino

Vito Boscaino — Fri, 23 May 2008 17:03:10 +0000

It’s always fun to see the convulted and tortured financial “logic” that companies will use to try to rationalze why the CEO needs the latest Bentley of the skies. Actually I think I see a business opportunity here, why not just prepare pre-formatted excel templates that a company could use to justify that new $35mm time-machine? Let’s see, it could include things like: flying at 51,000 feet versus 48,000 will allow flight speed to be increased by 2 MPH, thereby saving $25mm over six months. That tends to be the sort of logic that Board of Directors seem to be comfortable with.